Health care

Health audit appears to have mistakenly flagged claims, AG says

A screenshot of a page from the portion of the Public Consulting Group audit that details findings for The Counseling Center in Alamogordo.

The audit the state used to justify suspending Medicaid payments to an Alamogordo health center last year appears to have included mistakenly flagged claims, according to the state Attorney General’s Office.

That raises questions about the process the Human Services Department (HSD) used to ensure the audit was accurate before deciding to suspend Medicaid dollars to the Alamogordo organization.

Without that funding, The Counseling Center closed its doors last fall. While the AG’s office has completed its investigation into the organization’s spending of Medicaid money without filing charges, other investigations – sparked in part by the audit that led to the payment freeze – are ongoing.

Using a statistical formula, the contractor that performed the audit, Public Consulting Group Inc. (PCG) of Massachusetts, estimated there had been $612,000 in potential Medicaid overpayments to The Counseling Center over several years based on $1,873 in questionable costs.

But the AG’s office, during its investigation, flagged only $375 in questionable costs, said Jody Curran, the head of Attorney General Gary King’s Medicaid Fraud Control Unit.

If PCG had been working from $375 instead of $1,873, its estimate of Medicaid overbilling likely would have been less than the $612,000 the audit claimed.

What explains the difference? The AG’s report on The Counseling Center indicates that its investigators were able to resolve some of the issues the PCG audit flagged by reviewing records and interviewing staff. By contrast, PCG and HSD never gave James Kerlin, executive director of The Counseling Center, an opportunity to respond to the audit’s findings before the report was finalized and made public, Kerlin says.

In many cases, auditors present findings to staff of audited organizations to give them an opportunity to refute findings or address misunderstandings. For example, most state and local governmental agencies are audited annually in New Mexico. Staff within those agencies are afforded the chance to see and respond to audit findings within a certain amount of time before audits are made public.

HSD used the overbilling claim made in the PCG audit, in part, to find "credible allegations of fraud" against The Counseling Center in June 2013 – a finding that led to the payment freeze that put the organization out of business and sparked criminal investigations by the AG and other state and federal agencies.

The Alamogordo center is one of 15 organizations HSD accused of “credible allegations of fraud” last June. Attorney General Gary King, a Democrat who is running for governor against Republican incumbent Susana Martinez, announced last month that his office had found "insufficient evidence to support allegations of fraud" against the Counseling Center of Alamogordo.

Portions of the audit that detail specific findings against the other 14 providers remain secret, and the attorney general's investigations into those organizations are ongoing. As it did in the case of The Counseling Center, HSD froze funding to those organizations last year. Many went out of business, replaced by organizations from Arizona.

The discrepancies

During their investigation, the Attorney General’s staff reviewed records and interviewed PCG staff and employees of HSD about billing practices and how individuals are credentialed to provide services to clients. According to the AG’s investigative report, PCG flagged several billing claims because, it claimed, it appeared that “unqualified staff” had performed services.

But the AG found that wasn’t the case. “Most” of those issues “were resolved by reviewing the credentialing files and speaking with the PCG staff,” the investigation synopsis reads. It states that PCG flagged a number of claims because it thought one therapist wasn’t credentialed to provide rehabilitation services. But the AG’s office “carefully reviewed” that employee’s credentialing file and found that he did have the necessary qualifications, it states.

AG investigators also noted that they had located “paperwork for most of the missing documentation so that there did not appear to be a pattern of billing without supporting documentation,” according to the synopsis.

That wasn’t the only discrepancy between what PCG auditors and AG investigators each found.

Reviewing another set of claims submitted by the Alamogordo counseling center, state investigators flagged about $4,880 in questionable billing compared to the $43,137 highlighted in the PCG audit, Curran said. Both reviewed the same 10 cases involving 1,529 claims worth $193,871 in government money.

Not sharing audit findings

Kerlin wasn’t the only one denied an opportunity to see PCG’s findings and respond. PCG and HSD did not share the audit’s findings with any of the 15 organizations whose Medicaid payments HSD froze. It is unclear if HSD did a systematic check itself to make sure claims flagged weren’t mistakenly identified as inappropriate.

An HSD spokesman said his state agency reviewed some of The Counseling Center’s claims before finalizing the audit.

“The final number in the audit excludes things like billing errors and, you know, simple mistakes and stuff like that,” HSD spokesman Matt Kennicott said.

PCG declined to comment for this story.

Kerlin said he can’t assess the AG’s findings or those of the audit because “I never was and still don’t know what it was that we supposedly we did wrong.”

As part of its probe, the Attorney General’s investigators did find $13,000 in questionable claims submitted by the Alamogordo counseling center unrelated to last year’s audit.

But those claims were identified after following up on allegations made by an anonymous source, Curran said.

The Alamogordo center might still be under scrutiny. While the AG found “insufficient evidence to support allegations of fraud,” other law enforcement agencies – such as the state Taxation and Revenue Department, the FBI and the U.S. Attorney's Office – are continuing to investigate allegations, Kennicott said.

More In This Series

In June, Gov. Susana Martinez's administration decided to freeze Medicaid funding to 15 health organizations after an audit found problems including overbilling and potential fraud and asked the attorney general to investigate. New Mexico In Depth has been covering the fallout.

Jennings, New Mexico In Depth's executive director, is an award-winning veteran journalist who has worked at newspapers across the nation, including in California, Connecticut and Georgia. Besides working at the Albuquerque Journal and Santa Fe New Mexican, Jennings was part of a team that started the New Mexico Independent, an influential online newspaper.

If I learned one thing from the young people I’ve met while reporting this project, it’s that my daughter needs me to listen without judgment, forsaking the temptation to give advice or prattle on about my own childhood experiences.

As was stated before, in numerous articles, the Counseling Center in Alamogordo did not provide the documentation to PCG during the statewide audit and did not cooperate when requested. Although it is interesting that they appear to have “found” the documentation once the AG’s office started their audit and review.

Kathy

The way I read the article, the Counseling Center in Alamogordo was never given a chance to respond, nor were the other agencies cited- where did you get your information? It’s not anything I have heard or read before and I have been following this debacle.

FlameCCT

I’ve been through many audits, both federal and state. The audited agency already knows the documentation they are required to maintain and the number of years. Similar to tax returns where the individual files a “report” each year and is required to keep the documentation for 5 years.

An agency being audited is notified ahead of time and the requirements/assistance that they should provide. They are told which records will be audited (normally selected by random sample) and asked to provide specific, relevant documentation. If the documentation is incomplete then they are requested to provide the correct or complete documentation. That is the time to address the issue (respond) if they cannot provide the documentation that they are required to maintain. If there is a valid reason then the agency normally receives some additional time to provide the documentation before the report is finalized. Since they didn’t provide the appropriate documentation for the audit, I find it a little “interesting” that documentation was “found” later.

I understand that paperwork can be a pain however that does not absolve the agency of their fiduciary responsibilities. They chose to accept government funds therefore they chose to accept the accountability for those funds according to government regulation.

Save Behavioral Health NM

The Counseling Center was NEVER provided the results of the audit until AFTER they were already put out of business.

FlameCCT

They knew what records were required to be maintained. They knew what records were audited and what documentation was requested. They knew what they provided or not provided so they knew if there were issues. Were they so incompetent that they didn’t realize there were issues?

kj

In the same way HSD knew the requirements of their audit and yet failed it spectacularly? Of course, they have been given the benefit of being allowed to see and respond to the results, which the behavioral health agencies were not allowed to do.

See, the problem is no one really knows what was in the audit except a few people in the government. So basically, they are saying, “trust us. Have blind faith and yet shall be rewarded for.we are good and just.”

I just can’t bring myself to do that. Particularly not when the things we do know, largely contradict everything the government tells us. No mater how good the look-aid looks….

FlameCCT

The major difference being the supposed “spectacular failure”. This was an issue that occurred under the Richardson administration, was identified previously, and corrective actions were taken once identified. If the Martinez administration had refused to cooperate with the audit then I know this would also have been pointed out.

The problem is that AG King is the person/agency that controls the audit results once it was referred to his office. The Governor cannot direct his actions nor interfere in his determinations. Do you really think a Democrat AG would cooperate with the Republican Governor he wishes to replace if there were not an issue?

The biggest issue that I see is the reliance we have on government assistance. Some agencies/people take the assistance for granted and believe that it cannot be taken away. We see this with the funding from the ARRA and now the States/agencies are responsible for the funding of the positions. We see this the MedicAid/MediCare enhancements where the federal government funds it initially and then the States become responsible for more of the payments which has to be accounted for in the budget.

Kathy

” If the Martinez administration had refused to cooperate with the audit then I know this would also have been pointed out.”
For someone who is following this issue it is interesting that you say this. Our state auditor had to get a court order to get the PCG audit from HSD, and then got an audit that had been changed by HSD. Really? And with the PPACA and expansion of Medicaid, the state’s share of cost will never exceed 10%, I imagine a lower cost than what has been paid for emergency/ER treatment for indigents by states. I applaud Governor Martinez for fully expanding Medicaid in a state that has a 25% uninsured rate.

FairnessForProviders

Yes, let’s just believe HSD that all this happened under a different administration. More blame shifting! The Behavioral Health Providers would have applauded the opportunity to provide corrective actions to those problems that were identified in the audits. None of these agencies refused to cooperate, this is just what they want the public to believe so they don’t look like the TYRANTS that they ARE.

FairnessForProviders

The incompetence was PCG’s inability to see a piece of paper that was located in a personnel file, and the ability to read a Service Definition. Both of these documents were in the paperwork that was provided to both PCG and the AG.
The incompetence was also on HSD for not allowing Due Process, for hiding the audit from the Agencies, for providing Hector Baldaras with a copy that was “modified” (or should we say “missing information” or should we say “hidden”).
Why don’t you take a look at all the documentation that has been uncovered against HSD and the Governor?

FairnessForProviders

You speak as though you know what went on in The Counseling Center meeting rooms. The fact of the matter is that none of the agencies were “notified ahead of time” and they were not told which records would be audited until such time that the auditor sitting in that meeting room requested the record. The Counseling Center provided EVERY piece of detail that PCG requested. In a perfect world, PCG would not have missed such things as a staff members Credentials licensure, or a Service Definition that clearly spells out which staff can provide a service, but The Counseling Center understands that we are not in a perfect world and PCG just missed the details. (a mistake, you know, we are human) Furthermore, every piece of paper that was scanned by PCG is in storage and was used to provide the AG’s office the exact information that was provided to PCG, therefore, the mistake was PCG’s not some hidden paperwork. This “hidden” information is a ploy by the Governor’s office or HSD’s office to steer the publics attention away from the fact that they have ABUSED their POWER and ABUSED these agencies. They must shift blame somewhere, other than on themselves.
You speak about files and requirements to keep documentation for 5 years, well the case is very different for Medical Providers, contracts, tax returns, etc. If it were only as easy as keeping something for 5 years!! These agencies keep client files for 10 years and in the case of children more than 10 years. You state that “when documentation is incomplete then they are requested to provide the correct or complete documentation”….this is EXACTLY what all of these agencies would have LIKED to see instead of No Due Process and the Freezing of Payments. The Counseling Center has been audited by CYFD, DHI, BHSD, NMCD and many others on a yearly basis and those agencies would discuss findings and results especially if they could not find something they were looking for and The Counseling Center would provide the information. (99% of the time, the information was in the file or the binder or the EHR, and the auditor just missed it) These agencies have nothing to hide and all of them welcomed the feedback from the auditing agencies; however, HSD NEVER communicated with them about the audit, NEVER provided them audit results (not even to this day), and as the FACTS now show they were vetting companies from AZ before the audit was even begun. Facts now show the Gov. Martinez was taking campaign donations from one of the agencies that “won the contract”. Facts also show that there was Never Any finding of Fraud by PCG, as shown in the reports that are finally being publicized by news agencies.
What is amazing to me is that so many people “think they know” what has transpired, when truthfully…they know nothing at all.
I for one, sat in the meeting room with these auditors and was interviewed and provided information. I can speak to the FACTS.

Jon

Oh Kathy, don’t bother trying to have a dialog with this guy. He also thinks there is no evidence for human-caused climate change. I’ve been in mental health for 30+ years, provider, administrator, teacher. It’s hard to know what’s really what in all of this. Except, of course, the universally good advice, “Follow the money.”

FlameCCT

You’re correct, there is no evidence for “human-caused climate change. There is only hypothesis that have been modeled, which hypothesis/models have failed when the scientific method has been applied. However there is evidence that the climate has been changing for millenium in cyclical patterns. There is also evidence that temperature differentials correlate with solar radiation cycles.

I do agree with follow the money and apply it to the government as well as the agencies. Perhaps apply it to AGCC (aka AGW) proponents and opponents too!

kj

To respond to an earlier response. My contention is not that HSD “actually,” failed their audit. But clearly, simply looking at the provided documentation as provided to the State Auditor, it would appear that this is the case. Now that HSD has seen the results of the audit, they are supplying additional information and context to explain the issues and attempt to show that they were never committed or that, although the errors occurred, they were remedied through proper channels.

Now, I am not speaking to the validity of either HSD’s audit, nor their refutation of its findings. I am speaking to the fact that, somewhere, something in the documentation led to conclusions that may be erroneous and HSD now has an opportunity to attempt to address this.

The sad thing is that HSD, and many of their advocates, seem to be unable to grasp that errors in an event, in this case, audits (which, let’s face it, there is plenty of documentation out there across the country of these kinds of errors) suggests an inherent, systemic flaw. This of course doesn’t invalidate the findings of any and all audits out of hand, but suggests that perhaps if one agency (HSD) should be allowed to contend claims made against them, then perhaps the providers should have been afforded the same opportunity, and maybe, just maybe, there were errors in the Behavioral Health Audit that could have been resolved without going to such extreme measures.

Also, to speak to your point about Human Caused Global Climate Change, much of the research that has been done on millennial cycles and solar interference comes from the same groups and individuals who believe that those things do not account for their current findings and, thus, conclude that humanity has significantly contributed to current conditions. See, some times apparently contradictory theories, when tested, still point to the same conclusion.

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